Feature

Small-Town Caregiver

Focusing on rural and other markets with little competition, hospital operator Health Management Associates has carved out a profitable niche. But, despite its strong profits and exemplary balance sheet, it's a secret to most investors.

Hospitals have been one of the few healthy sectors in an ailing market. Thanks to rising admission rates and a strong pricing environment, the Standard & Poor's Health Care Facilities Index is up 14% so far this year, while the broader market has slipped 11%. One of the best operators in this group is Health Management Associates, which operates 44 hospitals, mostly in the Southeast and Southwest. Over the past 10 years, the company's revenues have grown eight-fold, to an expected $2.2 billion in the fiscal year that ends Sept. 30. Earnings, meanwhile, are up 10-fold, to an expected $235 million, or 97 cents a...